Microsoft's buy of Skype could revitalize Phone 7, give Microsoft a social, gaming, and collaborative strategy, and spell the end for old-fashioned telco voice. It will also certainly give Google a headache in its Voice, Chat, and even Android strategy!
It's really not as much about the technology as about the community, Nicole. Networks are valuable not for how they're built but who you can reach on them. Skype has scope (no euphonic punning intended!). With out-calling you can reach almost anyone in the world on it. That makes it a ready-made community/market, a base for a bunch of different service options ranging from social chat to enterprise unified communication and collaboration. If you're Microsoft, you need a strategy that takes your current strengths and builds them toward places where you're not yet strong. Skype can envelope Windows, Xbox/Kinect, Phone 7. It can even become an element in a tablet strategy. A community around Skype could really help Microsoft.
But...(there's always one of those)...Microsoft has to show more insight in positioning and exploiting Skype than they've done with other initiatives in the past. They're too slow to act, and today's market demands nothing less than naked aggression. Can they be that? I don't know. And the Skype community is an asset for the moment. It can dissipate, and be duplicated. Every day that passes raises the chances one or both will happen.
Tom, when you consider that we already have FaceTime and Google Voice, what reason is there to believe that Skype could attract people to Windows 7? I guess I'm saying I don't see it as a deal-breaker when preferred mobile OSes have capabilities that Skype offers... I guess because Skype is more sophisticated?
I don't think that's as much a problem as is generally believed, Paul. Some operators already support Skype, for example. Sprint has an integration deal with Google Voice. The operators know that with the movement toward LTE and all-IP voice models, they will either have to spend a lot to create an IP model of "POTS" voice, or adopt a P2P model like Skype. With voice revenues falling, I think there are many who'd like to see voice go away as a service and focus on data ARPU.
Microsoft could put a deal together to give carriers a right to handle the out- and in-calling between Skype and their traditional phone users within their areas, and provide them with IP support mobile-to-mobile or Skype-to-Skype. Most users don't pay incrementally for their voice calls; they pay a flat fee for a service.
On the intergration os Skype into its mobile software, how do you think MSFT will deal with the pushback from the wireless carriers. The wireless carriers will certainly nt be in a happy mood especially if the integration of Skype could give consumers a way to make cheap phone calls over the internet from mobile phones, without paying higher rates the carriers. MSFT badly need the support of the carriers if its mobile startegy is to be competitive. How do you think they will circumvent this issue?
Hey, Paul, I think my views here differ from the "norm" largely in that I'm judging the deal by its possibilities and they're handicapping the outcome. I think, as I said in my own blog yesterday, that Microsoft acquires through Skype the core of a strategy that could propel it from being the master of the PC into one that makes it a kind of Life Partner. However, it's only a core, and Microsoft like all large companies is like a big ball of cotton that surrounds every decision, deafening others to its value and insulating everyone from its effects. Half the company would probably never know the deal was done if they hadn't read about it.
That frames Balmer's challenge. He can't prioritize. The value of Skype is the value of that extensive one-of-a-kind social/collaborative user base. There are many reasons why a given person might be on Skype, and Microsoft has to exploit as many reasons as there are communities of interest, or they lose what they paid for. At the minimum, he has to integrate gaming collaboration, integrate unified communication and collaboration, and integrate Phone 7 voice, video, and social services, and he has to move very quickly. Otherwise this move telegraphs Microsoft's intentions to Google, Apple, and a lot of competitors who've been proven to be more agile and effective.
That's an interesting thought, nasimson, but I kind of doubt there will be that sort of tech transfer from Microsoft to Facebook. Skype is too expensive an asset for Microsoft for it to be giving away or even providing preferential terms to selling such a relationship to an OTT competitor. I think what's going to happen is that the deal will push Facebook to develop its own chat/voice/video capability more fully.
There are two models of the future of communication. One model presumes a ubiquitous service that attracts all the users and thus becomes the standard--the PSTN is the model here. The other is one that presumes a diverse set of applications or behaviors, and a set of services designed to communicate within the group who exercise this diversity. If I'm always on Facebook (which I'm not, by the way), and if my friends are likewise, then it makes sense for me to "ring them up" via Facebook, and Facebook can make that even more logical by providing tools, as they already do, to tell me who's online and give me an easy link to communicate with them.
I think the value of Skype (which, at the technology level is nothing more than a P2P form of VoIP) is the user base. The buy commits Microsoft to a "service-centric" rather than "social-centric" model, and I don't think they'll want to erode the value of that user base with an alliance with Facebook. But I've been wrong before; we'll have to see what they do!
The jury is out there disseting the MSFT-Skype deal and some are already calling it an idiotic deal. You seems to be seeing enough positives ofr MSFT coming fdrom this deal. A fellow thinkernnetter Ron was skeptical that the "Redmond Culture" may thwarts MSFT from fully maximizing the potential contain in this deal.
I know you outline in your vblogs a few areas that MSFT can integrate Skype but if you are to advise MSFT's CEO, what areas should they prioritize? With Skype boasting 145 million plus-users, including its 8.8 million paying users, MSFT have to get their priorities right to maintain this huge user base or risk destroying this great Skype community.
I see Facebook reaping a lot of benefit out of the acquisition because
1.Microsoft being an investor in Facebook affords it the access to Skype assets
2.Skype’s peer-to-peer network offerS video and voice services to the users of Facebook Chat. The cost of providing its ever expanding userbase with voice and video using conventional methods would have been too overbearing for Facebook.
The whole Amazon.reader debate is a double-stupid. It's stupid to think that there's any e-book buyer who doesn't know Amazon's URL, and it was stupider to let ICANN launch the whole free-form TLD initiative to start with.
Subsidized handsets, rather than locked handsets, should be the focus of regulators. We're not getting good deals, not fostering innovation, and weakening our power as buyers.
50 billion household devices will be on the Internet by 2020, according to Cisco. And we're hearing foreign governments are hacking our infrastructure. Surely our refrigerators are next!
YouTube's move to a partial pay-for-view model could help relieve a dearth of good new content but it could also complicate debates in many parts of the world over payment by content providers for delivery of their material to customers.
That's what Larry Page said on Google's earnings call, referring to the conjunction of mobile and the cloud. Well, let's chart it then! We need to be thinking about an Internet where 90% of our traffic goes to 70 destinations within 40 miles of us.
Facebook's Graph Search may face some profound challenges and risks, first, because Facebook users haven't been thinking of their posts as product reviews; and second, because Facebook will now have to contend with the social-network equivalent of SEO "gaming" of results.
EU operators are considering joining up to create a pan-European network to reduce competitive overbuild and cost. This might lower costs and focus operators on higher-level, more interesting services.
A survey by JD Powers found that customer interest in product features is lessening as phones evolve. Rather than features, price is driving purchases, and that change could have a dramatic impact on how IT departments secure these devices.
Skype recently acquired GroupMe, a startup developing tools to make mobile communications simpler. The move underscores dramatic changes in that market, ones that will change how executives communicate.
Maybe Google+ will be competitive and maybe it won't, but it's likely to introduce video calling and OTT communications as a replacement for standard telephony. There will be major consequences to this, and we don't have an FCC or political framework capable of coping.
Subsidized handsets, rather than locked handsets, should be the focus of regulators. We're not getting good deals, not fostering innovation, and weakening our power as buyers.
That's what Larry Page said on Google's earnings call, referring to the conjunction of mobile and the cloud. Well, let's chart it then! We need to be thinking about an Internet where 90% of our traffic goes to 70 destinations within 40 miles of us.
The IBM Smarter Commerce Global Summit in Monaco kicked into high gear today, and we've already begun to see news emerging from that lovely city-state by the sea.
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